Martin Bamford: Advisers agree on more than we admit

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Harmony is a funny old thing. I have no doubt our profession is in agreement about more than we are in disagreement. A quick scroll through the Twitter feed of an adviser, or the comments section of any opinion piece written for Money Marketing, and you might beg to differ. But there does seem to be harmony about the majority of what we do and believe.

Spending two days in sunny Port Talbot for the Great Pension Debate II last week, I was left to ponder on this concept.

It is fair to say those in attendance were all on the same page when it came to the principles of how suitable advice should be delivered. The room full of planners, paraplanners, compliance officers, actuaries, journalists, lawyers and even a few steelworkers, formed a consensus around desirable outcomes for consumers.

It is in all our best interests to deliver suitable advice that advances the financial positions of clients and the collective reputation of our profession. Despite a few rotten eggs causing real harm to many in the steelworker community, as starkly felt when visiting Port Talbot, we have come a long way in recent years.

Post-RDR, we have raised qualification standards and abolished commission on investment products; both steps helping to place us on a more equal footing with other advisers.

But there is, of course, a lot more to be done.

My fellow Money Marketing columnist Paul Lewis, addressing the pension debate last Tuesday, pulled no punches in his description of contingent charging on a percentage basis as a form of commission.

And the experience of steelworkers preyed upon by vulture advisers as the deadline for making decisions about the British Steel Pension Scheme loomed should tell us we have not got it right as a profession yet.

We will get it right by continuing to talk and by evolving our ideas around what good and excellent practice looks like.

One of my favourite sessions at the pension debate was a panel discussion on sustainable withdrawal rates. It got a little feisty – and ended with one delegate in the room telling the three panellists they were all wrong – but between them they had probably got it right.

This encompasses how we, as a profession, should be getting better: rather than stick rigidly to fundamentalist ideas about the only way to get things done, we need to listen to the arguments of others and find harmony which incorporates the best ways of doing things.

At the same time, we need to never stray from the basics.

It is really positive to see the emerging field of behavioural finance being applied within the profession. I have been devouring books on the subject and attended a behavioural science conference last summer in an attempt to better understand it.

What we cannot do is allow new approaches to replace our commitments to clients in terms of regulation and compliance.

Yes, human behaviour is an important driving factor behind the returns an individual will actually experience. No, a focus on the behavioural side of the equation does not negate the importance of assessing risk attitude, capacity for loss and need for risk within a financial plan.

Whenever I meet with other planners, I am always left feeling more positive about the future. Despite negative headlines, the occasional Twitter spats and disagreements on stage at conferences, we are all a lot more similar in our thinking than we might like to admit.